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When the economy is in a recession, the government will want to increase output. If the...

When the economy is in a recession, the government will want to increase output. If the multiplier equals 2.7 and the government increases spending by 147, how much will output increase by?

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Expert Solution

As it has been given that when the economy is in a recession, the government will want to increase output. If the multiplier equals 2.7 and the government increases spending by 147.

Output will increase by=multiplier* change in the government spending

=2.7*147

=396.90

Hence output will increase by 396.90

Rahul Sunny answered 2 years ago
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